Strategic human resource management is a process which is a major factor responsible for the business performance. Even though there is no absolute definition of strategic human resource management, we can say that Strategic human resource management focuses on the human resource management of a company and accordingly develops a strategy around it for the future benefit of the company. Strategic human resource management sets a path for the company and foresees developments and changes with time. Strategic human resource management works on a macro level while keeping in mind the micro elements of the company. Strategic human resource management is concerned with long term people and planning which reflects through the quality of work, job satisfaction, growth, structure and future targets.

Strategic human resource management keeps a check on the people who are responsible for implementing and formulating the approach to a high performance business. It is thus important to plan things accordingly to derive the maximum potential from the employees and the system.

Strategic human resource management is based on the basic principals and challenges of Human resource management expect for the fact that they are a little refined and look at long term goals. Human resource management looks at creating an hr strategy, while strategic human resource management is responsible for implementing them in a planned way keeping in check the various policies and regulations for the sustainable growth and improved performance of the company. Hence it is important for a company to be good at both the management sources.

There is also a distinctive relation between human capital and strategic human resource management. Human capital evaluates the potential capability of the human resource for the improvement of the strategy. The strategic human resource management on the other hand creates a structure for it to work on and helps managing the human capital to achieve the desired target.